Network Rail maintenance underspend is nearly �1.2bn

NR has underspent by nearly £1.2bn on maintenance work, deferred plans to renew infrastructure and let engineering work overrun at times, the Office of Rail Regulation (ORR) said today.

More than half of the delays on the network are caused by problems attributable to NR, which was facing a possible fine "in excess of £80m" if long-distance train punctuality did not improve, the ORR added.

The ORR said between April and October this year, there were around 16,000 infrastructure incidents across the network – nearly 5 per cent more than over the same period in 2012 when the weather was particularly bad.

These April-October 2013 incidents caused almost 1.7 million minutes of delays, the ORR said, adding that asset failures were "also on an increasing trend – particularly those related to track faults, telecoms failures and cable faults".

The ORR said NR had made progress in reducing delays associated with civil engineering assets, such as bridges, but it added that some of the increase in delays were down to NR's deferral of works for parts of the rail network, such as tracks, level crossings and electrification.

The ORR went on: "NR has also significantly underspent allocated funds. The company's own regulatory accounts for the period April 2009 to March 2013 show that it underspent nearly £1.2bn meant for maintenance and renewal of its assets.

"The regulator recognises that the company faces the challenges of managing traffic growth and timetabling on a congested network, as well as constraints on the access needed to work on the track. However, ORR has urged NR to make good use of the funds provided to renew the network and address the problems affecting performance."

ORR's railway planning and performance director Alan Price said: "Safety has to be NR's top priority. Beyond that, its focus should be on delivering improved performance and increased capacity on the railways.

"The company is currently operating with a large underspend and a significant shortfall against the performance targets it signed up to. It is also behind schedule on its own maintenance and renewal plans.

"These factors are now contributing to delays to rail passenger and freight services. NR must utilise its funding efficiently to address the increasing backlog of maintenance and renewals works, and improve performance, as it enters a new five-year delivery plan with more stretching targets.

"ORR has set new regulatory targets from 2014 for NR's asset management, particularly focusing on how it manages, maintains and renews the rail network. We want the company to move from a 'find and fix' approach to maintenance to a 'predict and prevent' culture, to reduce the amount of failures affecting services.

"We see signs of good practice and want to see Network Rail working with train operators to deliver better for customers from the outset of its new delivery plan."

The ORR said NR was between 0.9 and 5.1 percentage points short of the current funded punctuality targets, as 122,600 trains missed performance targets between July and October.